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Keeping up with digital is like navigating DC’s roads

April 14 th 2015

The rapid shifts taking place in digital media can be likened to the constantly-changing main roads of Washington DC.

Often, just as you are riding a one-way lane to your destination, you find it’s suddenly evolved into a multi-lane, two-way street which forces you to re-route. Then, just as you’re coming to grips with a new unknown path, you approach a roundabout that only those who planned ahead know how to exit.

The confusing twists and turns of DC traffic are best forgotten, however this ever-changing road network presents many similarities to the unstoppable digital advertising landscape today. SMI’s data shows that in 2014, digital ad spend experienced 19% year-over-year growth, representing 26% of the total ad spend market. Digital’s market share has nearly doubled since 2009 (13%).

In order to navigate the complex roundabouts and successfully switch lanes within digital, SMI has unveiled some new digital dimensions rooted in delivering more granular data and increased clarity to digital ad spend shifts and growths. They are

  1. Direct vs. Indirect
  2. Digital Site-type (i.e. social, video, TV networks)
  3. Digital Ad-type (following the trend of ad formats of display and video)

DIRECT VS. INDIRECT

Advertisers’ demands to see ROI on their digital investments, and for media companies to show results along with accountability, has led to a rapid increase in dollars invested in ad exchanges and ad networks. This shift from direct to indirect ad spend cannot be ignored with SMI’s digital ‘buy type’ data shows that in 2014, 30% of all digital ad spend went through ad networks or ad exchanges, up from 20% five years ago.

This is not a complete shock to the industry, but quite an eye-opener, as the demand of efficiencies at lower costs has boosted the use of technology leading to more programmatic and related managed services.

DIGITAL SITE-TYPE AND AD-TYPE

The evolution of digital space gives way to another important measurement metric: the changes, growth and movement within specific media sectors. SMI’s ‘site type’ data is a detailed look into the ad spend changes among similar digital properties. For example, social networking sites experienced the largest growth in year-on-year ad spend in 2014, up 57% from the year prior. When looking at digital video sites (such as YouTube) we see a well above average ad growth in 2014, up 29% year-on-year, and a huge 59% increase in compound annual growth over the past five years. Users can also view digital ad spending based on a specific type or format of ad.

It’s from these new groupings that the industry can get true and real-time insight into the digital space, to see what tradeoffs marketers might be making or pivots publishers are taking, and – most importantly – allow the industry to proactively gear up for where the digital road takes us next.

Tell us what you think and how important it is to understand digital ad spend data.

SMI Team

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